1. Field of the Invention
The present invention generally relates to electronic commerce, so-called “e-commerce”, on distributed networks such as the Internet and, more particularly, to an on-line negotiation methodology in which an e-commerce site can negotiate with a customer based on his or her dynamic profile.
2. Background Description
There are several books and articles in the literature describing human negotiations. We refer to Center for Information Technology and Management's (CITM's) project on auctions and bargaining in electronic commerce, Fisher Center for Information Technology and Management, University of California, Berkeley, in this regard. For more details, see http://www.haas.berkeley.edu/˜citm/auction/index.html. In this project, they also discuss the mathematical notion of negotiations in the form of state space and utility functions. Generally speaking, in these negotiations, the formulation of profiles is done by human beings, consciously and subconsciously.
The following describes a typical merchant-customer scenario (e.g., imagine a customer walking into an automobile showroom in the USA). Say, a customer walks into a physical store. The sales person forms an opinion of this customer's buying behavior, say, by observing the customer's appearance and body expressions, and mentally assigns a profile to the customer. Typically, this assignment is usually done on a subconscious level mainly, through a “gut feeling”. In a similar manner, the customer also assigns a profile to this sales person (e.g., by finding about the sales person from his or her past behavior). Then they both negotiate with each other according to the profile that they have assigned to the other party. As the negotiation proceeds, they keep updating the mental formulation of each other's profiles. Finally, either the negotiation breaks off or they come to a mutually agreed settlement.
No prior art is known that incorporates human nature in electronic negotiations, i.e., no one has provided an apparatus or a methodology for producing an “intelligent decision support system” for negotiations.
Both buyer initiated as well as seller initiated negotiations can be seen in the market today either in the form of haggling or a single or a multiple round bidding system. In U.S. Pat. No. 5,794,207 to Walker et al., there is proposed a method and an electronic apparatus that allows prospective buyers of goods and services to communicate a binding purchase offer globally to potential sellers, for sellers to conveniently search for relevant purchase offers, and for sellers potentially to bind a buyer to a contract based on the buyer's purchase offer. An example of this system can be seen in the Priceline.com business (see http://www.priceline.com), or in electronic procurement models.
Carrie Beam et al. in “CITM Working Paper 96-WP-1019: Electronic Negotiations through Internet-based Auctions”, Fisher Center for Information Technology and Management, University of California, Berkeley, December 1996, mention a pricing policy based on a customer's willingness to pay by dividing the market into segments and offering each segment a different price, all of this being done off-line. This methodology is applied by banks currently in giving mortgages, loans, deciding credit-ard limits, etc.
In U.S. Pat. No. 5,774,868 to Cragun et al., there is proposed an electronic sales promotion system that is based on recent customer purchases. Smolen et al. in U.S. Pat. No. 5,915,243 describe a method and apparatus for delivering promotions to a person, household or business on the basis of a dynamic information profile for that person, household or business, the dynamic information profile being formed by creating an initial information profile for the person, household or business, selecting one or more questions based on the information profile, presenting the one or more questions to a person, household or business, collecting the responses to the one or more questions, and updating the information profile using the responses to the questions.